Posts Tagged carbon

New Zealand is coming under increasing scrutiny in Lima, not least because it’s our turn to be reviewed by the UNFCCC process.

Early next week our representatives will have to defend our position and our lack of action to 190 governments in our first “multilateral assessment.”

Already, there have been some tough questions, coming especially from the EU and China. New Zealand’s answered them, but will have to more to defend itself than these carefully fudged answers.

Our negotiators have been trying to promote our position around the meeting, including a botched attempt in a science discussion yesterday, when they were interrupted halfway through a blatant PR presentation. They were told to get back to the issue at hand (science, not promotion of a country’s so-called “efforts”), after a number of governments objected to our highjacking the agenda.

Right now, our ballooning emissions are on track to be at least 36% above 1990 levels – instead of the 5% below 1990 that we’ve promised, and they’re going to continue going up. In short, we’re in trouble. And we’re going to get hammered for this next week.

But let’s turn for a minute to our efforts to actually solving this problem at the global level.

At the centre of NZ’s proposal for the Paris agreement is the notion that while elements of the global deal should be legally binding, targets for cutting emissions should not be legally binding.

Everyone should just add up what they feel like doing, put them in a schedule, and the sum total should be the agreed global target. And the national targets should not be legally binding.

This proposal drew praise from Obama’s climate envoy Todd Stern a few weeks back, and the idea is also supported by a band of the most recalcitrant countries on climate change: Australia (where “coal is good for humanity”) and Canada, home of the tarsands, who have, like NZ, walked away from the Kyoto Protocol.

On the other hand, the EU, in their first press conference in Lima this week, were unequivocal in their opposition to the idea. Elina Bardram, head of the EU delegation told reporters that:

“The EU is of the mind that legally binding mitigation targets are the only way to provide the necessary long-term signal, the necessary confidence to the investors … and provide credibility in the low carbon transition worldwide.”

This is the EU’s negotiating position on a global deal. The EU is one of the few who have actually put a target on the table – with a cut of 40% below 1990 levels by 2030, so they are backing this with action at home.

But here’s a funny thing about New Zealand’s proposal.

NZ’s “unconditional” target is to cut emissions by 5% by 2020 (below 1990). We have spelled out a specific set of conditions under which we’d improve this to 10% – or even 20%, although these two improved targets tend to cause hysterical laughter if one looks at our emissions projections.

“…[set] the world on a pathway to limit temperature rise to not more than 2˚C.”

That seems reasonable, right? On the face of it, it looks like NZ’s keen to keep to this globally agreed temperature limit (even though we know 2˚C of warming will wreak a fair level of havoc on the planet).

However, there appears to be a discrepancy between our conditions – and what we’re actually proposing for a Paris agreement. And this discrepancy has been pointed out by none other than the New Zealand Treasury.

Treasury’s advice to the incoming Climate Minister in November went to great lengths to explain our proposal, explaining in detail how we should only do our “fair share” – a line that is Tim Groser’s mantra, yada yada yada. But even Treasury admits:

“This may mean that the level of action is less than is required to limit global warming to two degrees, but negotiators have chosen to prioritise participation at this point in time.”

So let me get this right:

We are holding out on increasing our international commitment to climate action because we want to see a strong 2020 agreement that keeps the world on a below 2˚C pathway.

Yet even Treasury says our proposal for the Paris agreement will not achieve this. Have our negotiators had a brainfade? Did they forget what they agreed just a few short years ago?

Or do they have instructions to do their best to avoid a 2˚C pathway so that we don’t have to increase our target? Perhaps next week’s questioning could focus on this issue. I look forward to the event.

But one thing is clear: our Government has its head firmly planted in the sand on climate change, as activists across the country will be pointing out on Sunday.

The first week here at the climate talks in Warsaw kicked off with the super typhoon Haiyan hitting the Philippines in a terrible tragedy, brought into the meeting by the country’s lead negotiator Seb Yano, whose fast has been joined by many from civil society. The plight of his people has been a rallying call around the world as we all look at the aftermath of this storm with horror. Is it a direct result of climate change? What we do know is that the sea surface temps were 1.5degC above normal, and that we can expect more intense cyclones as the earth’s temperature warms. But as NCAR’s Kevin Trenberth wrote:

“The answer to the oft-asked question of whether an event is caused by climate change is that it is the wrong question. All weather events are affected by climate change because the environment in which they occur is warmer and moister than it used to be….”

As we’ve been all walking around in circles of the Polish National Stadium, trying to stay sane, looking at the images from the Philippines and the campaigning by their government to get a stronger outcome, it seems several governments have kept their eyes firmly OFF the ball, instead taking the opportunity of the occasion to walk away from their commitments. Most notably, Japan. After warning all year they’d do this, Japan announced their new target, sending it over a veritable climate cliff. The change in target would increase the emissions gap outlined by UNEP just last week by 3-4%, according to calculations by the Climate Action Tracker (disclosure: I’m here in Warsaw working for Climate Analytics, who run this analysis with Ecofys and the Pik Potsdam Institute). Instead of reducing their emissions by 25% by 2020 on 1990 levels, Japan’s emissions will now increased by 3.1%. The general thinking is that Japan’s change in target is down to the fact that they’ve had to close all 54 of their nuclear power stations, so have had to switch to coal. Not so. The CAT calculated that if Japan’s nuclear industry didn’t re-open at all before 2020, they could still reach a target of 17-18%.

“The expected increase represents only 55% of the increase in emissions from the original Copenhagen pledge to the new 2020 target. The remaining 45% must therefore represent a change in Japan’s political will to reduce emissions.”

Not exactly an inspiration to other countries who have come here to negotiate a strong new 2015 climate agreement in good faith, and certainly not an inspiration to the people in the Philippines. But perhaps this screenshot from Japan’s Ministry of Industry English website could explain it?

Screenshot of Japanese Industry Ministry’s english website.

Next up, Australia. As we all settled into the second day of the talks, Australia’s new government was busily dismantling its climate legislation, an exercise that will cost them more than $7billion. This may take a while, not least because the current Labour/Greens dominated Senate won’t change until after July. But the CAT has calculated that this move, if successful, and combined with Tony Abbott’s so-called “Direct Action” policy to replace it, they are very unlikely to meet their (already totally inadequate) pledge of 5% reduction on 2000 levels by 2020. It’ll begin a recarbonisation of Australia’s electricity sector, just at the time when the new legislation was beginning to make a difference. Australia’s not even sending a Minister here for the High Level segment of the talks, for the first time in 16 years. One gets the impression that this government really doesn’t give a flying (Castlemaine) XXXX about climate change, an extraordinary move given the rolling 12-month heat record set in August, September and October. I think it’s clear who Tony’s listening to. Certainly not Yeb Sano. Meanwhile the Polish Government is going ahead with hosting the World Coal Summit over the next two days. More on that in my next post.

Aafter all the leaks and attempted spin, the final version of the IPCC’s Summary For Policymakers of the Working Group One report on the physical science basis for our current understanding of climate change has just been released. Download the PDF from the IPCC site here. The full report will follow on Monday — a massive 3,000 page tome that summarises 9,200 scientific papers published since AR4 was released in 2007. The bottom line is clear enough:

Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, sea level has risen, and the concentrations of greenhouse gases have increased.

The Science Media Centre asked Professor Dave Frame, Director of the NZ Climate Change Research Institute at VUW to explain the key points:

It is extremely likely that human activities caused more than half of the observed increase in global mean surface temperature since 1950;

It is virtually certain that natural variability alone cannot account for the observed global warming since 1950;

Global mean temperatures will continue to rise over the 21st century if greenhouse gas emissions continue unabated;

The principal driver of long term warming is the total cumulative emission of CO2 over time;

To limit warming caused by CO2 emissions alone to be likely less than 2°C, total CO2 emissions from all anthropogenic sources would need to be limited to a cumulative budget of about one trillion tonnes of carbon, emitted as CO2, over the entire industrial era, about half of which have been emitted by 2011.

The emphasis on carbon budgets is new for this report, and makes the emissions reduction challenge we face only too clear. Here’s Fig 10 from the SPM:

The black dots on the bottom left represent historical carbon emissions up to 2010. The various coloured lines show what various emissions pathways — new for AR5 (see Skeptical Science’s explanation) — mean for global temperatures by 2100. Only the most aggressive emissions pathway — RCP 2.6, the purple line — gives us a chance of staying under a 2ºC target, but assumes that we are actually reducing atmospheric CO2 by the end of the century. It remains an uphill struggle, in other words, and the hill gets steeper the longer we leave starting out on the climb.

It’s shaping up to be a big week. On Friday in Stockholm (Saturday in NZ) the IPCC will release the final version (not the one that’s been leaked to and seen by all and sundry) of the Summary for Policy Makers of the Working Group One report of their Fifth Report (AR5 — official web site here). As you might expect, the usual suspects have been lining up to try and dominate the news media — to provide a carbon friendly “frame” through which to view the IPCC’s findings. Most of it has been singularly ineffective, as Graham Readfearn noted in the Guardian, but I’ll hold my fire until the final SPM is released. Watch this space…

Meanwhile, the Anglican Diocese of Wellington voted this weekend to join their colleagues in Auckland by divesting itself of any fossil fuel investments in its portfolio. The Auckland synod at the beginning of the month took the opportunity to listen to two presentations that I think it worth drawing attention to here. First, Jim Renwick from VUW (an IPCC lead author) lays out the basic science that underlies the case for action to reduce emissions:

…then economic commentator Rod Oram explains the “carbon bubble” in market valuations of fossil fuel energy stocks, and why it would make sense to avoid that risk:

Two compelling presentations, with an obvious conclusion that the members of the Anglican church were happy to accept. We should not be investing in companies whose value depends on the burning of excessive amounts of carbon.

In this week’s news-packed edition of The Climate Show we have an exclusive interview with Jim Salinger, probably New Zealand’s highest profile climate scientist, talking about extremes and the shape of things to come. John Cook discusses his new paper with Stephan Lewandowsky, Recursive fury: Conspiracist ideation in the blogosphere in response to research on conspiracist ideation, which is already upsetting climate cranks around the world, plus we look at carbon bubbles, renewable energy beating coal on price, and a simply superb iPad app.

Watch The Climate Show on our Youtube channel, subscribe to the podcast via iTunes, listen to us via Stitcher on your smartphone or listen direct/download from the link below the fold.

The world’s big oil and gas companies could face cuts in market valuation of up to 60% if the world acts to cut carbon emissions, a report by bankers HSBC warned last week. Business Greensummarises the report’s findings:

A new report from the banking giant finds that 17 per cent of Norwegian company Statoil’s reserves would become “unburnable” in a world where oil and gas use falls as countries seek to keep carbon concentrations in the atmosphere to 450 parts per million (ppm), the level the International Energy Agency (IEA) estimates is necessary to deliver a 50 per cent chance of limiting long-term temperature rises to 2°C.

HSBC estimates that as much as 6% of BP’s reserves could be at risk, 5% of Total’s, and 2% of Shell’s. But the biggest risk to oil company values could come from reduced demand for oil and gas leading to a fall in prices. Business Green notes:

…the potential value at risk for leading fossil fuel firms could rise to between 40 per cent and 60 per cent of current market capitalisation. BP’s market capitalisation currently stands at around £90bn, compared to Shell’s £147bn, Statoil’s £53bn and BG Group’s £39bn.

The HSBC report is the first acknowledgement by a mainstream financial institution that fossil fuel companies may be over valued in a world where steep cuts in carbon emissions are (one hopes) inevitable. The idea was first mooted in 2011 by the Carbon Tracker Initiative, whose Unburnable Carbon report estimated that as much as 80% of proven fossil fuel reserves would have to remain in the ground. That idea fuelled 350.org’s latest campaign, as Bill McKibben explained in an influential Rolling Stone article last year:

We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn. We’d have to keep 80 percent of those reserves locked away underground to avoid that fate. Before we knew those numbers, our fate had been likely. Now, barring some massive intervention, it seems certain.

Yes, this coal and gas and oil is still technically in the soil. But it’s already economically aboveground – it’s figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide – those reserves are their primary asset, the holding that gives their companies their value.

Stockmarket prices are supposed to factor in — or take into account — all of the assets and risk a company faces, but to date there has been little sign that markets have seriously considered “unburnable carbon” as a liability. The HSBC report may be the first sign of a shift in financial markets, but I suspect it will take clear evidence of concerted global action to cut emissions before markets will run scared of carbon. However, when it happens, the change could be swift. There could be carbon carnage on the trading floors as financial markets ditch fossil fuels for renewables.

There’s a stark lesson there for government and business leadership in Australia and New Zealand — and everywhere else where public money is subsidising the production and use of fossil fuels. Today’s investments in extracting fossil carbon only make sense if you are blind to the climate consequences. Those are now inevitable, and so oil and gas reserves — and especially coal fields — will inevitably become stranded assets, a millstone round the neck of the national and global economy.

Gerry Brownlee, formerly a minister of energy and fossil fuel, and currently the Minister for Transport and for bulldozing democracy, heritage and social order in Christchurch, today announced that petrol duty will be increasing by 3 cents a litre annually for the next 3 years to fund new roads.

Specifically mentioned are the Rangiriri and Tamahere-Cambridge sections of the Waikato Expressway, the Mackays to Peka Peka section of the Wellington Northern Corridor and the four-laning of the Groynes to Sawyers Arms (Johns Road) section of the Western Corridor in Christchurch.

The reason given for this policy is that the funding is needed for the Roads of National Significance programme and some upper North Island transport projects. I guess that means more spaghetti motorway in Auckland.

This is crazy policy.

The first level of craziness of the petrol duty hike is that it will affect the benefit-cost analysis (BCA) of each Roads of National Significance (RONS) project. Projects like Transmission Gully Expressway, have already been justified to hearings before the Environment Protection Authority on very marginal benefit/cost ratios. Julie-Anne Genter of the Greens said the benefit/cost ratio of Transmission Gully was 0.6. The RONS don’t even break even in BCA terms.

Now with the added petrol duty, the marginal benefit/cost ratio would be even worse. However, I bet that won’t make Gerry Brownlee or Steven Joyce any less obsessed with them.

The second level of craziness with the petrol duty increase is the Government’s complete failure to understand carbon pricing (which is what a petrol duty is) and to anchor their transport, energy and infrastructure policy with effective carbon pricing.

I have no problem with the price of petrol or diesel increasing. Road transport has many externalities that are not priced. It is “elephant in the room” obvious that the most important unpriced externality of liquid fossil fuels is global warming. And not a lack of four-lane expressways.

“But we have an emissions trading scheme!” I hear some one say. “Surely, road transport fuels are included in the NZETS?”

Yes we sort of have an emissions trading scheme which includes liquid fossil fuels which sort of prices carbon. But NZ carbon prices have crashed 72% in 2012.

According to estimates by the Energy and Data part of Steven Joyce’s mega-ministry MoBIE, in the three months ended on 30 September 2012, the NZ emissions trading scheme probably accounted for 0.93 cents out of the regular petrol price of $2.09 per litre.

So we may describe New Zealand’s petrol pricing policy as having two mutually conflicting parts. The price includes a component for revenue gathering for unneeded four-lane RONS expressways (3 cents/litre). The price also includes a component for the NZETS carbon price (0.93 cents/litre).

And the four-lane expressways part exceeds the carbon-pricing ETS part by a factor of 3.

This is the complete opposite of effective carbon pricing. Brownlees’s petrol duty, to coin an expression, is an anti-carbon tax. What a shambles!

Where we are, where we should be and the consequences. Climate Action Tracker’s graphic on our future choices.

And so. Another set of climate talks done, this year dusted with Doha sand and labeled the “Doha Gateway”. I’m not sure what they’re a gateway to, certainly no immediate improvement to the climate. The final hours were bizarre, to say the least. We began the day on Saturday with a text much improved from the day before, but with some major issues outstanding. Ministers wrangled behind closed doors for most of the day, changing bits of text here and there.

We were preparing for Russia who, with Kazakhstan, Belarus and the Ukraine, were set to continue the talks way into Saturday night. They were holding out in the informals, furious about the discussions on hot air.

Hot air

The “Russian factor” is one those of us who’ve been involved for a few years are all too familiar with. Just when you think there’s general agreement, in come the Russians who manage to drag the talks on for hours.

“Hot air” has been major problem with the Kyoto Protocol for years. Somehow, the Russians managed to get the Kyoto negotiators to agree to a baseline of 1990, before the collapse of the former Soviet Union, which meant millions of tonnes of carbon credits ended up in the hands of Eastern European countries, bringing them a handy income, and other countries an easy and cheap option to do nothing at home and buy cheap hot air. Russia has 6Gt of hot air – that’s how much it’s been cheating the atmosphere.

In Durban and Doha, New Zealand has sided with this team against the wish of the rest of the world to make sure that this “hot air” didn’t get carried over into Kyoto’s second commitment period (CP2).

A report released last week by Climate Analytics showed that if this hot air was allowed, governments could meet their pledges, buy hot air and continue emitting on a business as usual pathway to 2026. The Ukraine argued that they needed their hot air credits as their economy was growing, but the report showed that they would have to have an amazing 11.6% annual growth in GDP to do so. I don’t think anyone expects Ukraine to have such a boom economy.

In practice there are few who can benefit from their hot air surplus carried over from CP1 to CP2 are not many: Australia, Norway and the Ukraine. New Zealand would have had some too, from our Kyoto forests, but we’re not in CP2 so we can’t use them anyway. At the end of the day, while the carry-over from CP1 to CP2 was allowed, many governments signed a political declaration as part of the agreement that they wouldn’t buy this hot air anyway. Even Japan signed it – but of course NZ didn’t.

The killer for Russia and New Zealand were the “elegibility” rules, where it was decided that governments outside Kyoto would not be allowed access to the carbon markets it set up. The New Zealand delegation was at the heart of the earlier draft of the text seen on Friday morning that had every government and its dog allowed access to Kyoto’s Flexible Mechanisms.

But overnight on Friday night that the Ministers put a stop to that, so NZ was left out in the cold. While we could, on the face of it, continue to trade hot air to meet our “target”, we run the risk that the credits may well not be eligible for emissions under the post 2020 global agreement as the rules for that haven’t yet been settled.

When the final plenary began, to everyone’s surprise, the somewhat flambouyant Qatari Minister Abdullah bin Hamad Al-Attiyah gaveled it all through. Watch the beginning of the webcast – it was quite something. He ignored the Russian flag being pounded on their table and simply declared the Doha Gateway agreed. It was the first bold move this former OPEC president had made throughout the entire talks – if he’d bashed heads together a bit earlier we could have achieved a lot more.

Russia was furious, and the US made reservations, but they were simply told that all of it would be noted in the report. There are precedents for such action, such as with Bolivia in Cancun. In 1992 the chair ignored the Saudis and gaveled the UNFCCC itself through when the Saudi flag was still clearly up.

Ratching up emissions cuts

Another vaguely positive outcome for the Kyoto Protocol CP2 agreement was the review by April next year of the adequacy of commitments under the IPCC’s 25-40% recommendation. This leaves open the option of Europe finally agreeing to go to 30%, something it can easily do.

Of course Kyoto, as Tim Groser argues, doesn’t cover many countries at all, and certainly a small chunk of global emissions. The global deal is on track to be agreed by 2015, but won’t come into effect until 2020. All the hot air from Groser about working on a global deal essentially means we’re off the hook until 2020, apart from our meagre pledge that remains “conditional” on a global deal. As I’ve said before, the best thing Groser could have done to help that global deal get through was to sign up to Kyoto’s CP2 to show good faith.

Finance, loss and damage

The most disappointing part of the Doha was the decision to simply keep talking on the major issue of Finance. Governments agreed in 2009 to, by 2020, contribute a total of $100bn a year to help the developing world develop clean energy and adapt to climate change, but the money is still not forthcoming. Indeed at the beginning of Doha there wasn’t enough money to pay the secretariat for another year.

The trade-off here was the inclusion of the “loss and damage” terminology in the final text, where the US had been fighting to keep it off the table. While again, like the finance section, the agreement is to simply keep talking about what to do on Loss and Damage, this was a blow to the US.

To sum up, nothing was done in Doha that will immediately stop the relentless rise of global emissions. There were some agreements to agree sometime in the future. The meeting was never going to achieve much, but to get Kyoto’s CP2 done, and blocking the “cheaters” like NZ and Russia out of carbon trading without an emissions target was the biggest win.

For us, no doubt John Key and his pals will be happy with the fact that there’s little to change our somewhat dubious status of having the sixth fastest growing emissions in the OECD.

Our government’s “drill it mine it frack it” policy can continue unabated, our foresters can continue to replace plantations with dairy and we don’t really face any pesky global rules that will make us increase our targets before 2020. How our ETS will look after 2015 remains to be seen, as we won’t be able to trade our way through it.

As I left Doha, contemplating the 3-4degC world the next generations will face unless more action is taken, I was reminded of Percy Bysse Shelley’s famous “Ozymandius” which somehow seems apt:

The section of the recent G8 Camp David declaration which deals with energy and climate change can only be described as depressing. No clarion call from these nations. Instead, a confused jumble starting with an ’all of the above’ statement:

… we recognise the importance of meeting our energy needs from a wide variety of sources ranging from traditional fuels to renewables to other clean technologies. As we each implement our own individual energy strategies, we embrace the pursuit of an appropriate mix from all of the above in an environmentally safe, sustainable, secure, and affordable manner.

How fossil fuels can be considered environmentally safe and sustainable elements in an energy mix is not explained. But apparently this mix is somehow compatible with a low carbon economy:

We also recognise the importance of pursuing and promoting sustainable energy and low carbon policies in order to tackle the global challenge of climate change.

Those quoted sentences follow each other in the statement. They are contradictory in their substance. Evidently the word ’also’ miraculously dissolves the contradiction. You can have your cake and eat it too.

To establish that conflicting reality the declaration goes on to throw around the words sustainability, safety and environmental concern as a respectable veneer for the disreputable continuing search for oil and gas to the limits of their availability:

As we pursue energy security, we will do so with renewed focus on safety and sustainability. We are committed to establishing and sharing best practices on energy production, including exploration in frontier areas and the use of technologies such as deep water drilling and hydraulic fracturing, where allowed, to allow for the safe development of energy sources, taking into account environmental concerns over the life of a field.

There follows a nod in the direction of energy efficiency and renewable energy. The latter needs to be cost-effective, presumably measured against fossil energy. Note the emphasis on energy security and savings ahead of addressing climate change:

We recognise that increasing energy efficiency and reliance on renewables and other clean energy technologies can contribute significantly to energy security and savings, while also addressing climate change and promoting sustainable economic growth and innovation. We welcome sustained, cost-effective policies to support reliable renewable energy sources and their market integration. We commit to advance appliance and equipment efficiency, including through comparable and transparent testing procedures, and to promote industrial and building efficiency through energy management systems.

Somehow, along with the continuing search for fossil fuels to burn they’re also going to be giving attention to keeping global temperature within bounds:

We agree to continue our efforts to address climate change and recognize the need for increased mitigation ambition in the period to 2020, with a view to doing our part to limit effectively the increase in global temperature below 2oC above pre-industrial levels, consistent with science.

The statement is plagued by self-deception. IEA head Fatih Birol said last week at a Reuters’ Global Energy & Environment Summit: ’What I see now with existing investments for plants under construction…we are seeing the door for a 2 degree Celsius target about to be closed and closed forever. This door is getting slimmer and slimmer in terms of physical and economic possibility.” Yet the G8 leaders, in the same week, were speaking as if fossil fuels can continue to be discovered and exploited at the same time as climate change is ostensibly addressed.

One hopes that the declaration was stitched together as a diplomatic exercise and that its contradictions can be explained by that fact and are not representative of the thinking of all the nations represented at the summit. Indeed it’s hard to see how any intelligent person could think all those things at the same time and not recognise their incompatibility. But it’s still unnerving. Not least because it’s a mirror of the New Zealand government’s position and will no doubt encourage them to maintain that the increased fossil fuel exploration and exploitation they have committed to is strangely consistent with fighting the danger of climate change.

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